Time Warner Cable rep wants to auction targeted VOD ads

Speaking at an industry conference, the CEO of Time Wanrer Cable painted up a …

Yesterday Glenn Britt, CEO of Time Warner Cable, talked about targeting ads based on the viewing patterns of their cutomers. Speaking at an annual cable industry in Atlanta, Britt said:

"We have the ability, using our set tops and new software we're putting in, to begin targeting advertising. We're actively looking at this."

More specifically, Britt talked about data mining the company's information on customers and their TV habits, and then using that information to deliver targeted ads for video-on-demand (VOD) channels. The analyst Reuters tapped for the article agreed that the cable companies need to leverage their customer data somehow, and that ad-supported VOD could be huge:

"Google and Yahoo have made fortunes out of very good information about what consumers do, but virtually no information about who is doing it," said Craig Moffett, a senior analyst at Sanford C. Bernstein. "Cable operators have the potential to do that one better."

The set top box from your friendly neighborhood cable company is an excellent tool for matching known user data (your subscriber info) with viewing patterns (picked up as you surf the channels), and then it's just a matter of coming up with algorithms for connecting the pieces into a cohesive picture of what you're interested in, and selling ad time based on that info. Time Warner suggests an auction model for that last step, "modeled after Google's AdSense system on the Internet," and is reportedly working out agreements for that sort of model right now.

If that idea takes off, there is no reason to doubt the power of having advertisers bid for airtime just like they bid for Google keywords now. However, don't start cheering for ad-subsidized premium channels just yet—Time Warner's stockholders would probably complain unless most of the windfall from this strategy makes it to the bottom line and fattens the company's coffers. If it's successful enough, however, other cable providers are likely to catch on and start serving up similar models of their own, and that's when it becomes important to differentiate yourself from the competition again. Patience, young grasshopper.

In the meantime, Time Warner Cable has a few other tricks up its corporate sleeve. After a very successful market test in Columbia, SC, the company wants to roll out a new feature called Start Over in seven or eight more markets (sorry, no word on which markets yet). This feature allows viewers who missed the start of a show to hit Start Over, and that show will start over from the beginning, allowing you to arrive a bit late to your favorite show and not miss a beat. Of course, those of us who have TiVos, HTPCs, or other DVR solutions at hand might not care so much, but even then you're covered if you forgot to tell your TiVo to record Lazytown and you missed Sportacus' flashy entrance. Or whatever.

And after that, TWC wants to provide VOD access to shows you missed entirely, up to a week's worth of programming on tap under the title Look Back. That sound you hear is an echo of ABC's maneuvers yesterday, which we already covered here. In general, Britt apparently thinks he's onto something re-he-heally good here, as he says that "TV is more powerful than the Internet at the end of the day." The overtones here sound a bit like "Chew on that, Google."

The media executives keep saying that their business models are adapting to a new environment where they want to give customers the choice of enjoying their content whenever, however, and wherever they want to, and this is no exception to that rule. So if consumer choice is really all that important, shouldn't we all be free to watch our shows or listen to our music, purchased from iTMS or Vongo or ABC.com, on our iPods or Creative Zens or Micro Orbiting HQs, while swinging from the chandeliers? Instead, it seems like every entertainment industry initiative that looks like it holds some promise gets held up by licensing negotiations and DRM issues. Full-on VOD and programs like Look Back could be tough to sneak by the network lawyers and execs—just look at how popular the remote DVR idea is with the content producers.